Implementation of corporate governance principles in a South African JSE-listed multinational organisation .
ABSTRACT Multinationals in South Africa with foreign shareholders often have to comply with more than one system of corporate governance. This study assessed how the board of directors of a single JSE listed multinational organisation reconciles and applies the corporate governance requirements of three different corporate governance systems, being the United Kingdom Combined Code of Corporate Governance, the German Corporate Governance Code and King III Report on Governance for South Africa. The research methodology used was qualitative and data was gathered using both semi-structured interviews as well as other documentary sources of information. A themed content analysis was conducted based on the responses of ten participants interviewed. The participants were members of the board of directors of the organisation and provided personal insights into the application of the three systems of corporate governance as well as identified challenges in doing so. The research findings indicate that only one director had full and detailed knowledge of the different requirements of all three systems of corporate governance and thus the board as a whole could not effectively apply three systems of corporate governance. Local directors place large emphasis on local requirements while foreign directors place more emphasis on foreign requirements, creating various tensions in implementation. The key message from this research is that board education and detailed knowledge about what systems of corporate governance are applicable to multinationals is critical in effective implementation of corporate governance.
Corporate governance, Directors of corporations.